The Energy Act

Most properties with EPC ratings within Band F or G are no longer legally allowed to be let since the Energy Act 2011 was enforced on 1 April 2018.

As of 1 April 2018, the MEES (Minimum Energy Efficiency Standards) took effect, meaning that all F & G rated

properties need to be bought up to a minimum standard of ‘E’ before they can be let. Compliance with these regulations are a Landlord’s responsibility along with the cost of the works. If a landlord lets a property that is rated below the minimum level then they will be liable to substantial fines.

However, there are some exemptions available and these are required to be logged on the Government’s public online exemption register. These exemptions are:

  • The ‘Golden Rule’: where an independent assessor determines that all relevant energy efficiency improvements have been made to the property or that improvements that could be made but have not been made would not pay for themselves through energy savings within 7 years.
  • Devaluation: where it is determined that the relevant energy efficiency improvements that could be made to the property are likely to reduce the market value of the property by more than 5%.
  • Third Party Consent: where consent from persons such as a tenant, a superior landlord or planning authorities has been refused or has been given with conditions with which the landlord cannot reasonably comply.

These exemptions are valid for 5 years and cannot be transferred to new Landlords, who are required to re-register an exemption, assuming the property continues to be eligible for an exemption.

Given the drafting of these regulations, undoubtedly there will be a number of challenges through the Courts and there is potential for a two-tier market to evolve, resulting in lower values for poor rated properties.

It is therefore imperative to take a proactive approach and professional advice to ensure a property remains lettable. Stratton Creber Commercial provide a full range of commercial property services so please contact us to further discuss your requirements.

Tom Neville BA (Hons) MRICS

RICS Registered Valuer